When you will visit Reliance Retail shops, you will find a few lesser-known foods and daily use of home products alongside global products. These lesser-known products have Reliance brand identity. It is a direct indication that Mukesh Ambani’s led Reliance Retail wants to compete against big giants like Nestle, Unilever, and Coca-Cola.
Reliance Retail Strategies to Capture the Grocery Market
Snac tac noodles is a Reliance product to compete against Maggi, a worldwide noodle manufacturing company, whereas with Yeah! colas, Reliance is face to face with global beverage brand Coca Cola.
With these new products, Ambani wants to grow Reliance Retail globally. Currently, the grocery market is worth $608 billion and expected to grow by 20% in the coming three years, as per the Forrester Research report.
The latest product offerings by Reliance supermarket are not only cheap but such products have more demands at local Kiranas. In India, local kiranas occupy 80% retail market.
Reliance wants to capture the major portion of the grocery market. The company’s recent Future Retail deal also indicates that it will be the retail king in the coming years. Though, the Future-Reliance deal got stuck in a legal fight with Amazon. It is hurting the ambitious targets of Reliance badly.
As per the internal reports gathered by Reuters, Reliance plans to expand and promote the company labelled products in the non-food areas as well.
One of the Reliance executives who did not reveal his identity said:
“The company’s trying to offer brands of equivalent quality at a lower rate. From a consumer standpoint, that works. It’s a fact, five years down the line, private labels will be a different landscape.”
Recent Growth of Reliance Retail
Reliance Retail raised $6.4 billion by selling a 10 per cent stake to investors including Silver Lake Partners and KKR & Co Inc in 2020.
The company is growing its geographical network by opening new outlets and joining local kiranas in its network. Once the Future-Reliance deal confirms, it will be having a whopping 2100 outlets that are three times more than the current numbers.
Other retail companies like Amazon, Flipkart are worried about the exponential growth of Reliance Retail. They are also expanding their local product portfolios to compete against Reliance.
Ambani’s led Retail network is advertising the locally labelled products under vocal for local scheme initiated by the Indian Government. Such initiatives will bring tough competition to global food makers.
“It is Reliance’s own brand. So we have to place these prominently,” a store employee at a Mumbai supermarket said. Inside Reliance’s supermarkets, Nestle’s Maggi “2-Minute noodles” sit next to Snac tac “Ready in 2 mins” noodles, both in yellow-coloured packaging with an image of a red bowl full of noodles, with Snac tac costing roughly 18 per cent less. Bottles of Yeah! colas stood beside Coca-Cola and PepsiCo’s offerings, at around half the price.
Alok Shah, a consumer analyst at India’s Ambit Capital who has visited stores to assess private labels, said:
“The only option consumer companies have is to market more or to match the pricing of private labels. Reliance’s brands are going to be a much bigger threat.”
A spokesperson for ITC said, “All large retailers have their brands that compete with established brands.”
Soni Gupta, a student from Mumbai, looked happy with the current local cheap noodles brand offered by Reliance.
He said:
“It’s cheaper than Maggi. I quite like it.”
Different Media portals contacted Nestle, Coca-Cola, Pepsi, Amazon, and other big retail brands related to Reliance marketing strategies. Nobody commented about it. Reliance Retail did not respond related to the latest supermarket offerings.
